Terex (NYSE:TEX – Get Free Report) and Lincoln Electric (NASDAQ:LECO – Get Free Report) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.
Dividends
Terex pays an annual dividend of $0.68 per share and has a dividend yield of 1.3%. Lincoln Electric pays an annual dividend of $3.16 per share and has a dividend yield of 1.2%. Terex pays out 34.7% of its earnings in the form of a dividend. Lincoln Electric pays out 31.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Terex has raised its dividend for 5 consecutive years and Lincoln Electric has raised its dividend for 30 consecutive years.
Risk and Volatility
Terex has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500. Comparatively, Lincoln Electric has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500.
Institutional & Insider Ownership
92.9% of Terex shares are held by institutional investors. Comparatively, 79.6% of Lincoln Electric shares are held by institutional investors. 1.6% of Terex shares are held by insiders. Comparatively, 1.7% of Lincoln Electric shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Profitability
This table compares Terex and Lincoln Electric’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Terex | 2.23% | 12.24% | 5.16% |
| Lincoln Electric | 12.35% | 39.23% | 15.25% |
Analyst Recommendations
This is a breakdown of current ratings for Terex and Lincoln Electric, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Terex | 0 | 5 | 5 | 2 | 2.75 |
| Lincoln Electric | 0 | 4 | 5 | 1 | 2.70 |
Terex currently has a consensus target price of $75.64, indicating a potential upside of 48.64%. Lincoln Electric has a consensus target price of $307.22, indicating a potential upside of 17.22%. Given Terex’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Terex is more favorable than Lincoln Electric.
Earnings & Valuation
This table compares Terex and Lincoln Electric”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Terex | $6.68 billion | 0.87 | $221.00 million | $1.96 | 25.96 |
| Lincoln Electric | $4.23 billion | 3.38 | $520.53 million | $10.01 | 26.18 |
Lincoln Electric has lower revenue, but higher earnings than Terex. Terex is trading at a lower price-to-earnings ratio than Lincoln Electric, indicating that it is currently the more affordable of the two stocks.
Summary
Lincoln Electric beats Terex on 10 of the 17 factors compared between the two stocks.
About Terex
Terex Corporation manufactures and sells aerial work platforms and materials processing machinery worldwide. It operates in two segments, Materials Processing (MP) and Aerial Work Platforms (AWP). The MP segment designs, manufactures, services, and markets materials processing and specialty equipment, includes crushers, washing systems, screens, trommels, apron feeders, material handlers, pick and carry cranes, rough terrain cranes, tower cranes, wood processing, biomass and recycling equipment, concrete mixer trucks and concrete pavers, conveyors, and related components and replacement parts under the Terex, Powerscreen, Fuchs, EvoQuip, Canica, Cedarapids, CBI, Simplicity, Franna, Terex Ecotec, Finlay, ProAll, ZenRobotics, Terex Washing Systems, Terex MPS, Terex Jaques, Terex Advance, ProStack, Terex Bid-Well, MDS, and Terex Recycling Systems brands. Its products are used in construction, infrastructure, and recycling projects; quarrying and mining, and material handling applications; maintenance applications to lift equipment or material; and landscaping and biomass production industries. The AWP segment designs, manufactures, services, and markets aerial work platform equipment, utility equipment, and telehandlers under the Terex and Genie brands. Its products include portable material lifts, portable aerial work platforms, trailer-mounted articulating booms, self-propelled articulating and telescopic booms, and scissor lifts, as well as related components and replacement parts for construction and maintenance of industrial, commercial, institutional, and residential buildings and facilities, transmission and distribution lines, construction and foundation drilling applications, and other commercial operations, as well as in tree trimming and various infrastructure projects. The company offers financing solutions to assist customers in the rental, leasing, and acquisition of its products. Terex Corporation was founded in 1933 and is based in Norwalk, Connecticut.
About Lincoln Electric
Lincoln Electric Holdings, Inc., through its subsidiaries, designs, develops, manufactures, and sells welding, cutting, and brazing products worldwide. The company operates through three segments: Americas Welding, International Welding, and The Harris Products Group. It offers brazing and soldering filler metals, arc welding equipment, plasma and oxyfuel cutting systems, wire feeding systems, fume control equipment, welding accessories, and specialty gas regulators, and education solutions, as well as a portfolio of automated solutions for joining, cutting, material handling, module assembly, and end of line testing, as well as involved in brazing and soldering alloys, and in the retail business in the United States. In addition, the company manufactures copper and aluminum headers, distributor assemblies, and manifolds for the heating, ventilation, and air conditioning sector in the United States and Mexico; provides specialty welding consumables, wear plates and maintenance and repair services for alloy and wear-resistant products used in mining, steel, agricultural, and industrial mill applications; and designs and manufactures robotic assembly and arc welding systems that automate the tacking and welding of steel beams. Further, the company serves general fabrication, oil and gas, power generation, process, automotive and transportation, and construction and infrastructure industries, as well as heavy fabrication, ship building, and maintenance and repair markets. It sells its products directly to users of welding products, as well as through industrial distributors, retailers, and agents. The company was founded in 1895 and is headquartered in Cleveland, Ohio.
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